Huayi takes hard way into Hol­ly­wood

China Daily (Canada) - - ANALYSIS - By CHEN YINGQUN

cheny­ingqun@chi­nadaily.com.cn

Chi­nese firms buy­ing Hol­ly­wood movie stu­dios is noth­ing new, but Wang Zhongjun says that would not be his first op­tion in try­ing to get his me­dia com­pany to grow in­ter­na­tion­ally.

Wang, pres­i­dent of Huayi Brothers Me­dia Corp, said his com­pany will in­crease its in­ter­na­tional pres­ence, es­pe­cially in the United States. But buy­ing big com­pa­nies over­seas is not the best way to do it, he said.

“Just like when Huayi started its film busi­ness in China, what we did was to sign many tal­ented film di­rec­tors and pro­duc­ers, and we hope this model can be used in the US,” he said. “Af­ter all th­ese years’ ex­pe­ri­ence in the US, we think it is pos­si­ble to do that.”

Huayi was founded in 1994 by Wang and his brother Wang Zhon­glei. The com­pany’s roots are in movie pro­duc­tion, and it has ex­panded into de­vel­op­ing and dis­tribut­ing mo­bile games and build­ing theme parks in Asia. As a listed com­pany, Huayi’s mar­ket value is about $80 bil­lion, equal to about five Dream­Works, Wang Zhongjun said.

Orig­i­nally Huayi em­barked on its in­ter­na­tional jour­ney by co-fi­nanc­ing movies but met with fail­ure.

In 2014 the com­pany changed its ap­proach and di­rectly in­vested $130 mil­lion to es­tab­lish a wholly owned US sub­sidiary to pro­duce and dis­trib­ute movies and TV shows in the US.

Huayi also plans to work with STX En­ter­tain­ment, a Bur­bank-based, fully in­te­grated film and TV com­pany, to jointly in­vest in and co-pro­duce 18 films to be dis­trib­uted world­wide by 2018. This will be the first time that a Chi­nese com­pany has par­tic­i­pated in all ac­tiv­i­ties in the value chain, from pro­duc­tion to mar­ket­ing and dis­tri­bu­tion.

The deal would also help Huayi pro­mote its brand glob­ally and ob­tain ac­cess to the Hol­ly­wood film in­dus­try.

“I think it’s an im­por­tant strat­egy for Huayi in Hol­ly­wood to look for good di­rec­tors and pro­duc­ers, and use the Chi­nese mar­ket’s cap­i­tal strengths,” Wang Zhongjun said.

“In the fu­ture, we would like to have a con­trol­ling stake and to de­velop Huayi into a very good stu­dio with our own prod­ucts, our own pro­duc­tion lines, and dis­tri­bu­tion chan­nels over­seas.”

In its quest to de­velop a bet­ter in­ter­na­tion­al­iza­tion strat­egy, Huayi held a fo­rum on the topic in Bei­jing re­cently, invit­ing in­dus­try in­sid­ers for in­sights.

“Huayi is still new at work­ing with the world and the ty­coons of the en­ter­tain­ment mar­ket,” Wang Zhongjun said.

“We are still dis­cussing it — how to find a bet­ter way that suit us, and how to find bet­ter plat­forms that help in­te­grate Chi­nese cul­ture and world cul­ture. Th­ese are all things we are look­ing for.”

Ren Guo­qiang, se­nior part­ner of Roland Berger Strat­egy Con­sul­tants, said he ap­pre­ci­ates that Huayi has given a lot of thought to in­ter­na­tional strat­egy, not­ing that Wang Zhongjun has spent a lot of time in Hol­ly­wood com­mu­ni­cat­ing with in­ter­na­tional tal­ent.

In­ter­na­tion­al­iza­tion is not only about how much of the com­pany’s busi­ness, or clients or in­come come from over­seas, he said. The first step for com­pa­nies to be­come in­ter­na­tional is for the owner of the com­pany to be in­ter­na­tional.

“Hir­ing some peo­ple with an in­ter­na­tional back­ground doesn’t mean the com­pany is in­ter­na­tional or is ca­pa­ble of man­ag­ing in­ter­na­tional busi­ness,” Ren said. “How the en­tre­pre­neur thinks about the global mar­ket, what his global vi­sion is, and how

It’s an im­por­tant strat­egy for Huayi in Hol­ly­wood to look for good di­rec­tors and pro­duc­ers, and use the Chi­nese mar­ket’s cap­i­tal strengths.”

pres­i­dent of the Huayi Brothers Me­dia Corp

to re­al­ize that vi­sion step by step mat­ters a lot. The en­tre­pre­neur’s vi­sion, in­sights and even his lo­ca­tion all af­fect the com­pany’s in­ter­na­tion­al­iza­tion.”

Teng Bin­sheng, a pro­fes­sor with the Che­ung Kong Grad­u­ate School of Busi­ness, a pri­vate in­sti­tu­tion in Bei­jing, said Bol­ly­wood in In­dia makes more movies a year than any­one, but most have no au­di­ence out­side their home coun­try be­cause there is no ef­fec­tive in­ter­na­tion­al­iza­tion.

“But in the past few years, I have seen that some Chi­nese com­pa­nies have been able to make first-class movies to­gether with their Hol­ly­wood part­ners, which is a good sign that Chi­nese com­pa­nies are able to go global.”

Teng said that if the Chi­nese movie in­dus­try wants to be in­ter­na­tional, then it is im­por­tant for Chi­nese com­pa­nies to stay in Hol­ly­wood and talk to top tal­ent and gen­er­ate for­mats with Chi­nese char­ac­ter­is­tics as well as be­ing pop­u­lar with peo­ple over­seas.

“So we need com­pa­nies like Huayi to com­bine the re­sources and strengths of both China and over­seas.”

PRO­VIDED TO CHINA DAILY

Wang Zhongjun (left) and Wang Zhon­glei at the pre­miere of the film MrSix in Bei­jing, 2015.

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